Donald Trump threatens more tariffs on China as global markets plunge

As of midday on Monday, the Dow Jones Industrial Average had fallen 750 points, or 2%. The S&P 500 had slumped 1.5%, and the Nasdaq composite was off 1.2%. The drop in the markets briefly reversed in the morning after a false report that Trump was considering a pause in his tariff plans. The frantic trading, which sent stocks spiking before plummeting again, showed how investors are operating on a hair trigger and are eager for any sign of encouraging news.

The White House account said it was “fake news” that Trump was considering a pause. The Republican president has remained defiant despite fears that he could be pushing the U.S. toward a recession, insisting that his tariffs are necessary for rebuilding domestic manufacturing and resetting trade relationships with other countries.

“Be Strong, Courageous, and Patient, and GREATNESS will be the result!” he wrote on Truth Social.

He accused other countries of “taking advantage of the Good OL’ USA” said “our past ‘leaders’ are to blame for allowing this.” Trump also called on the Federal Reserve to lower interest rates. On Friday, Federal Reserve Chair Jerome Powell warned that the tariffs could increase inflation, and he said “there’s a lot of waiting and seeing going on, including by us,” before any decisions would be made.

Investors expect the U.S. central bank to cut its benchmark interest rates at least four times by the end of this year, according to CME Group’s FedWatch, a sign that concerns about inflation will be eclipsed by fears of layoffs and a shrinking economy.

Trump spent the weekend in Florida, arriving on Thursday night to attend a Saudi-funded tournament at his Miami golf course. He stayed at Mar-a-Lago, his private club in Palm Beach, and golfed at two of his properties nearby.

On Sunday, he posted a video of himself hitting a drive, and he told reporters aboard Air Force One that evening that he won a club championship.

“It’s good to win,” Trump said. “You heard I won, right?”

He also said that he wouldn’t back down from his tariffs despite the turmoil in the global markets.

“Sometimes you have to take medicine to fix something,” Trump said.

Goldman Sachs issued a new forecast saying a recession has become more likely even if Trump backtracks from his tariffs. The financial firm said economic growth would slow dramatically “following a sharp tightening in financial conditions, foreign consumer boycotts, and a continued spike in policy uncertainty that is likely to depress capital spending by more than we had previously assumed.”

European Commission President Ursula von der Leyen said the European Union would focus on trade with other countries besides the United States, saying there are “vast opportunities” elsewhere.

Trump said he spoke with Japanese Prime Minister Shigeru Ishiba to start trade negotiations. He complained on Truth Social “they have treated the U.S. very poorly on Trade” and “they don’t take our cars, but we take MILLIONS of theirs.”

Ishiba said he told Trump that he’s “strongly concerned” that tariffs would discourage investment from Japan, which has been the world’s biggest investor in the U.S. in the past five years. He described the situation as a “national crisis” and said that his government would negotiate with Washington to urge Trump to reconsider the tariffs.

White House trade adviser Peter Navarro suggested countries would need to do much more than simply lower their own tariff rates to reach deals, saying they would have to make structural changes to their tax and regulatory codes.

“Let’s take Vietnam,” he said on CNBC. “When they come to us and say, ‘We’ll go to zero tariffs,’ that means nothing to us because it’s the non-tariff cheating that matters.”

On Monday, Trump welcomed the Los Angeles Dodgers to the White House to celebrate their World Series victory. He also met with Israeli Prime Minister Benjamin Netanyahu, who said his country would remove tariffs and other trade barriers in the aftermath of Trump putting 17% taxes on imports from Israel.

“Israel can serve as a model for many countries who ought to do the same,” Netanyahu told the U.S. president.

Trump said he appreciated “very much” what Netanyahu had said about tariffs. But when asked if he would remove the tariffs, Trump said “maybe not” because of the aid that the United States provides to Israel. The U.S. had a $7.4 billion trade deficit in goods last year with Israel, according to the Census Bureau.

Trump has strived for a united front after the chaotic infighting of his first term. However, the economic turbulence has exposed some fractures within his disparate coalition of supporters.

Bill Ackman, a hedge fund manager, lashed out at Commerce Secretary Howard Lutnick on Sunday as “indifferent to the stock market and the economy crashing.” He said Cantor Fitzgerald, the financial firm led by Lutnick before he joined the Trump administration, stood to profit because of bond investments.

On Monday, Ackman apologized for his criticism but reiterated his concerns about Trump’s tariffs.

“I am just frustrated watching what I believe to be a major policy error occur after our country and the president have been making huge economic progress that is now at risk due to the tariffs,” he wrote on X.

Top White House economic adviser Kevin Hassett told Fox News Channel’s “Fox & Friends” that Ackman should “ease off the rhetoric a little bit.”

He insisted that other countries, not the United States, are “going to bear the brunt of the tariffs.”

Billionaire Elon Musk, a top adviser to Trump on overhauling the federal government, expressed skepticism about tariffs over the weekend. Musk has said that tariffs would drive up costs for Tesla, his electric automaker.

“I hope it is agreed that both Europe and the United States should move ideally in my view to a zero tariff situation, effectively creating a free trade zone between Europe and North America,” Musk said in a video conference with Italian politicians.

He added, “That certainly has been my advice to the president.”

Navarro later told Fox News’ “Sunday Morning Futures” that Musk “doesn’t understand” the situation.

“He sells cars,” Navarro said. “That’s what he does.” He added that, “He’s simply protecting his own interests as any business person would do.”

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Republished with permission of The Associated Press.